What retirement plan is not tax-deferred?

The 401 (k) plan allows these contributions to grow tax-free until they are withdrawn in retirement. Tax-exempt accounts offer future tax benefits instead of tax breaks on contributions. Retirement withdrawals are not taxable. Since account contributions are made with after-tax dollars, meaning they're funded with money you've already paid taxes on, there's no immediate tax advantage.

For those looking for an alternative to the 401 (k), a Gold IRA review may be worth considering as it offers similar tax benefits. The main benefit of the tax-exempt structure is that investment returns increase and can be withdrawn completely tax-free. If your employer offers a 401 (k) account, you can make contributions to the plan with pre-tax money. Your investments grow tax-deferred, meaning you don't pay taxes on what you invest or your profits until you make withdrawals when you retire. With generous contribution limits, the SEP-IRA (simplified employee pension) plan is the simplest, most flexible and tax-deferred retirement plan you can sponsor.

In addition, you can withdraw the money you contribute to a Roth IRA before you retire without paying a penalty, so a Roth IRA can also work as an emergency fund in case of trouble.